RAND Health Insurance Experiment - Findings

Findings

An early paper with interim results from the RAND HIE concluded that health insurance without coinsurance "leads to more people using services and to more services per user," referring to both outpatient and inpatient services. Subsequent RAND HIE publications "rule out all but a minimal influence, favorable or adverse, of free care for the average participant" but determined that a "low income initially sick group assigned to the HMO... greater risk of dying" than those assigned to fee-for-service (FFS) care. The experiment also demonstrated that cost sharing reduced "appropriate or needed" medical care as well as "inappropriate or unnecessary" medical care. Studies of specific conditions and diseases in the RAND HIE data found (for example) that the decrease in use of medical services had adverse effects on visual acuity and on blood pressure control.

Newhouse, summarizing the RAND HIE in 2004, wrote "For most people enrolled in the RAND experiment, who were typical of Americans covered by employment-based insurance, the variation in use across the plans appeared to have minimal to no effects on health status. By contrast, for those who were both poor and sick -- people who might be found among those covered by Medicaid or lacking insurance -- the reduction in use was harmful, on average".